 Hello and welcome to CMC Markets and this quick look at the week ahead beginning the 16th of October and they are coming off the back of more record highs for global stock markets, US markets, made new record highs over the past week or so. The German DAX done the same thing, the Nikkei 225 is at its highest levels in 21 years and the FTSE 100 and FTSE 250 have also hit record closing highs as well. So what does that mean for the week ahead? Well, there's a number of key factors that I'm looking at this week. One of which is the UK economy and obviously the European Council meeting at the end of the week and the current deadlock in the Brexit talks. Now, I think it's very easy to get a little bit too hung up on the on the politicking that goes around with respect to these talks. Certainly introduced a significant amount of volatility in it to the way the pound has been trading over the course of the past few weeks and it's likely to continue to do so. But I think the focus this week, apart from obviously the EU Council and the fact that ultimately there will be some shift, I think in terms of the Brexit talks and I think a little softening of tone from the European Union with respect to a willingness to talk about trade because I think when you talk about the Irish border and you talk about trade, there has to be overlap in that and I think the European Union has to acknowledge that fact. And I think that could be a theme that could start to develop over the course of the next few weeks, certainly in the context of its effect on the pound over the course of the past few days. We've seen a significant amount of volatility there, but overall we're still in the broad uptrend that we've been in since the lows in March and April. And actually it does look as if we're probably going to close higher for the first time in a week or for the first time in about three or four weeks. And the potential for that for further gains I still think remains fairly decent, particularly if we start to look at the economic data which is due out later this week. This week we start with UK CPI and I think the potential for the Bank of England to push rates higher at the November meeting and when it's due to analysis latest policy decision and the quarterly inflation report. And I think there is a concern that CPI could well head above 3%. So I think a quick reminder, CPI last month came in at 2.9%. I think if it comes in anywhere near that or even actually pushes up to 3%, I think that reinforces the case for the Bank of England to push rates up. More importantly than that, it's the relationship between CPI and wages. And on Wednesday we have the latest unemployment numbers. Unemployment is its lowest level since the 1970s which suggests that the labour market is probably going to start showing signs of becoming a little bit tight. And I think that could have significant upward pressure on wages. We've already seen wages start to show signs of increases from the lows that we saw earlier this year at 1.7%. Expecting the wages numbers to come in around about 2.1 or 2.2%. And also on Wednesday, on Thursday we've got UK retail sales. More importantly we've got Bank of England Governor Mark Carney talking to the Treasury Select Committee later this week along with David Ramston, the new MPC policymaker and Silvana Temreiro. So it'll give us a good indication as to how they feel about UK monetary policy going forward, given that we don't really know where they stand in terms of the hawkish-dovish scale. But I'm certainly not expecting anything too dovish at the moment. I think the markets are increasingly pricing in the prospect of a rate rise either in November or December. And I think if Mark Carney was to pull back from that, I think it would probably be perceived very negatively by the market. So looking at where the pound is at the moment, we've got decent support around about the 50-day moving average, which comes in around about $1.3120. And below that, obviously the lows last week are in the wake of those payrolls numbers which came in around about $1.3020. Looking for a pushback through $1.3320, if we can get through that, then there's a good chance we could push back towards the highs that we saw earlier in September. More importantly, I think with respect to hero sterling, we've seen a significant potential reversal in the context of the move higher that we've seen over the course of the past few weeks. This candle here, which was unable to push through the 50-day moving average, is also what is termed as a key day reversal, which suggests to me that having squeezed all the way up to $9030 this week, we could well look to retest levels that we saw at the beginning of the month, around about $8820, and the fact that the oscillator is starting to look a little bit overbought and could actually start to trend lower. Another factor keeping an eye out for this week is obviously the next steps in the Catalonia-Spain constitutional crisis. Now, Spanish Prime Minister Rajoy has given the Catalan government a deadline with which to state really whether or not they intend to declare independence. And I think the Catalan leader, Carlos de Puigdemont, is in a very, very difficult situation because ultimately, if he backs down, I think there's a decent chance the Catalan government could collapse and there'd be new elections. And if he does declare independence, he runs the risk of arrest, and ultimately I think he also runs the risk that there will be new elections anyway in Spain. And I think this is probably the only way that this is going to get resolved. I think it's going to be very, very difficult for Mr. Rajoy to act in any other way than try and adopt some concessions or call for new elections in Spain. And ultimately, I think that will dictate where we go to next on the IBEX. Now, we've looked at this IBEX chart here. We can see that we've been trending lower now for quite some time. And as we can see from the volatility over the past few days, we haven't as yet traded out of the channel that we've been in since May. And until such times as we do, I think it's quite sensible to conclude that any rally in the IBEX is likely to be sold into with resistance around about 10,400, decent support around about the 10,000 round number level, and a potential test lower. Let me keep an eye out with respect to the overall trend on the IBEX. That's been a significant underperformer. If we do get a resolution this week, then be prepared to see this particular index break up quite aggressively to the top side. What am I keeping an eye out for later this week? Well, I've already talked about the various speeches, the UK data, the China GDP, Chinese retail sales, and the Catalonia. But we also have US banks earning season that continues with Morgan Stanley and Goldman Sachs. JP Morgan has already reported that it's bond trading revenues are fairly weak. I would expect that same sort of trend to manifest itself in the Morgan Stanley numbers and the Goldman Sachs numbers. So that's it for this week. Thanks very much for listening. It's Michael Hughes and talking to you from CMC Marcus.